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Costco Is A Sell Despite Coming Dividend Hike

Published Sun, 14 Apr 2019 15:05:22 -0400 on Seeking Alpha

Costco (Nasdaq: COST) is probably well-known for most consumers looking for a good deal. However, the company is not as well-covered in the dividend investing community.
A reason for that is probably the unimpressive dividend yield, which currently sits at just under 1%. Still, for long-term investors looking to grow their income over time as opposed to maximizing current income, the historically high dividend growth rate should earn this stock a place on the watch list.
Sadly, though, this nice dividend streak is more than priced into the stock at this time, making it just too expensive for new investors looking to add the stock.
Data by YCharts
Over the last five years, shareholders have enjoyed a stock that has appreciated from approximately $100 to the current level of $242 for a total gain of 142% or an average annual return of more than 19%. Adding in the approximate yield of 1% over the period, we arrive at a total shareholder return of more than 20%. In addition to this, investors have received some nice special dividends along the way.
More than 20% annually from a stable, and many would say boring, stock operating in a fiercely competitive market is nothing short of impressive.
Historical Dividend Growth Costco has been growing its business aggressively for decades on end. Since 2004, it has also grown its dividend at a very respectable rate. In May 2004, Costco paid its first quarterly dividend of $0.10 per share. Since then, it has grown steadily... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
TARGET 88.50   15.5 5.71 2.64 2.90
WAL-MART STORES 114.72   39.7 2.89 2.12 1.85

TARGET - TGT
TARGET - TGT  


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